A Telugu translation of all three parts of “The Kisans Are Right. Their Land Is at Stake” is now complete.

Part 1: https://rupeindia.files.wordpress.com/2021/02/kisans1telugu.pdf

Part 2: https://rupeindia.files.wordpress.com/2021/03/kisans2telugu.pdf

Part 3: https://rupeindia.files.wordpress.com/2021/03/kisans3telugu.pdf

P. Jamuna has translated all three parts.

Part 1

The protesting kisans on the borders of Delhi repeat one thing over and over: When fighting against the three farm-related Acts, they are fighting to save their land.

“See, they want to capture our land.  Adani, Ambani, corporate houses…” says one young protester. Though wheelchair-bound, he has come from Punjab to take part in the Delhi protest. An older kisan, shelling peas for the protesters’ collective kitchen, declares: “The Britishers, they captured our land. We shooed them away. We have to do the same thing now. We will not rest till we shoo them away.”

Yet the authorities are unanimous in declaring: the kisans are misled. There is no threat to their land. 

  • The Prime Minister asserted on December 15: “a massive conspiracy is underway to misguide farmers in Delhi and nearby areas. They are being intimidated that others will occupy the land of farmers after the new agricultural reforms. Brothers and sisters, I want to know from you whether any dairy owner who enters into a contract with you for milk takes away your cattle. Whether the land of those trading in fruits and vegetables is taken away?”
  • “No corporate can snatch away any farmer’s land as long as Narendra Modi is Prime Minister of the country”, proclaimed Home Minister Amit Shah on December 25.
  • The Chief Justice of India too assured the kisans on January 12, 2021: “We will pass an interim order saying no farmer’s land can be sold for contract farming”. Senior advocate Harish Salve, appearing for the Government, informed the Court: “The Attorney General and Solicitor General can assure that these concerns are unfounded….  no lands will be sold off.”
  • The Government’s top policy-making body, the Niti Aayog, produced a paper in November 2020, in which it declared that “apprehensions like corporates usurping the lands of the farmers, or forcibly taking their assets by manipulating the agreement are totally misplaced.”
  • Indeed the alleged land-snatchers themselves, Reliance Industries, issued a press release on January 4, 2021, asserting: “Neither Reliance nor any of our subsidiaries has purchased any agricultural land, directly or indirectly, in Punjab/Haryana or anywhere else in India, for the purpose of ‘corporate’ or ‘contract’ farming. We have absolutely no plans to do so.”
  • Earlier, more candid, statements by the rulers
    However, probing a bit deeper, it becomes clear the kisans are right. What is at stake, ultimately, is their land. The three Acts are an integral part of a larger policy, the result of which will be to part peasants from their land.

    Indeed, just a few months ago, the rulers themselves were keen to advertise this fact to corporate investors. In his speech of May 12, announcing the “Corona package”, Modi said: “In order to prove the resolve of a self-reliant India, Land, Labor, Liquidity and Laws all have been emphasized in this package.” What “Land” was he referring to?

    Two days later, the Chief Economic Advisor, Krishnamurthy Subramanian, spelled out what the Prime Minister meant: “Land and labour are really factor market reforms [in textbook economics, Land, Labour and Capital are the three ‘factors of production’ — RUPE] because these are factor inputs that really affect the cost of doing business and you have seen a lot of changes on these recently at state level. Uttar Pradesh, Madhya Pradesh and Gujarat have announced fundamental labour reforms and other states are also in line to follow up…. Karnataka had just gone ahead and changed the regulation on acquisition of land for business. Land can now be directly bought from farmers in the state and other states will also imbibe the model.”

    The old land reform law in Karnataka prevented direct acquisition of land by private business, in order to protect peasants from force and fraud. The removal of this protection[1] in December 2020 was immediately welcomed by big business.

    In line with this, at the height of the Corona crisis, the Modi government initiated two measures: drone-based mapping of all residential areas in the rural areas; and a model legislation for states to implement ‘conclusive’ land titling. Before we discuss these steps, let us briefly state the argument of this article.


    Summary

    (1) Over the last two decades, international agencies and the Indian government have explicitly been preparing the ground for transfer of the lands of poor peasants. They term this the creation of “vibrant land sales markets” for farmers who “find their lands too small to be a viable source of livelihood.”

    (2) In pursuit of this aim, the Indian government is trying to establish a system of ‘conclusive titling’ of all land in the country, whereby the State would permanently guarantee the title of the title-holder against any other claimants. The Niti Aayog is accordingly pushing state governments to adopt a draft ‘conclusive titling’ bill.

    (3) In our country, land continues to be the single largest source of livelihood and sustenance, and there are often multiple, historically established, claims on it. These claims need to be determined and satisfied through a social process, not a mere administrative one. The present rapid forced-march of conclusive titling and digitizing land records threatens to oust large numbers of poor peasants from the most important rural means of production.

    (4) This process is actually driven, not by the needs of the poor peasants, but the needs of international and domestic corporate investors, who want, from remote locations, to be able to take investment decisions related to Indian land.

    (5) Ongoing changes and growing uncertainties in the world economy, as well as those anticipated in the world climate and environment, have fueled a drive on the part of international agribusinesses and financial investors to get control of land, including agricultural land, in the Third World. At the same time, in the neoliberal era, Third World economies have opened themselves to foreign investment further and further, and (in line with this) scrapped step by step their existent legal restrictions on corporate and foreign ownership of agricultural land.

    One such global trend is the growth of organised retail, generally linked to foreign investment. This is leading to “the corporate takeover of the domestic food systems of the developing countries as a whole.”[2] This process reorients Third World countries’ agriculture away from staple crops for domestic consumption, toward fresh fruits, vegetables, and other produce demanded in the developed world and by the Third World countries’ domestic elites. Domestic food security systems are dismantled, and Third World countries become dependent on imports of foodgrains from developed countries (which have large surpluses of these grains). Foreign and domestic corporate investors’ penetration of the agricultural sector of a Third World country spurs the “concentration and foreignization”[3] of land.

    (6) Three decades of neoliberal restructuring of India’s agriculture have led to an acute crisis, manifested most starkly by the suicides of over 3,00,000 peasants since the late 1990s. Official data reveal that the poor peasantry is squeezed, with their farm income not covering even their consumption needs.[4] At the same time, they are unwilling to part with their land. Their stubborn resistance is due to their knowledge that other secure livelihoods are not emerging (indeed, are disappearing), and that land and access to common property resources can still yield some subsistence for the peasant family.

    However, the corporate takeover of India’s food system will press upon the various sections of the Indian peasantry in multiple ways. The winding up of official procurement will reduce farmgate prices for foodgrains, and force growers in procurement regions to shift to growing crops demanded by corporates, in a desperate attempt to meet their consumption expenditures. But the specifications and investments demanded by organised retail and by exporters are unaffordable for these small producers. Meanwhile, the winding down of the Public Distribution System will raise the consumption costs of peasants in other regions, including in tribal areas. All these trends will intensify the debt crisis of different sections of the peasantry, and lead to parting them from their land.

    The kisans are not misled. Their resistance to this process is in their long-term interest. It is also in the national interest, by defending the food security and land of the country. It is thus a direct heir to the legacy of the struggles of India’s peasantry under British rule.


    We now proceed to elaborate the above.

    The aim: creating “vibrant land sales markets”
    One of the key elements of the neoliberal ‘reform’ process has been the transferring of control over land. As is well known, the Modi government in its first term tried to dilute or virtually scrap various provisions of its predecessor’s Land Acquisition, Rehabilitation and Re-settlement Act, 2013[5], against the interests of peasants, and in favour of forcible land acquisition.

    That attempt at amendment had to be dropped by the rulers in the face of opposition both by peasant organisations and parliamentary parties, but the rulers plan to bring it back: According to a former member of the Prime Minister’s Economic Advisory Council (PMEAC), “With the ruling party expected to be placed comfortably from November 2020 it is hoped to introduce the land bill again.”[6]

    However, the process of separating peasants from their land is not limited to the acquiring of land for industrial, infrastructural, mining or real estate projects. It is also part of the re-structuring of India’s agriculture in the interests of monopoly capital. As part of this process, the neo-liberalizers wish to first fix ownership of the land on some person, whether or not that person has the exclusive right to it, so that ownership can thereafter be transferred to others. For this purpose, they reduce the question of land rights to a purely managerial question of improving the efficiency of land administration, which is the opposite of the truth. They have always been quite clear in stating the aim of this exercise: to facilitate the transfer of land. (Toward the same end, they have also been pushing for a new law for the leasing of land, aimed at promoting the leasing of small peasants’ land to large landholders.)

    A 2001 report by the leading international consulting firm, McKinsey, claimed (without citing any reference) that “most, even 90 per cent by one estimate, of the land titles in India are ‘unclear’”.[7] One reason for this unclear status, it claimed, is the strength of tenancy rights in India: “both legal as well as illegal occupants gain de facto rights on the property they occupy, increasing the time and paperwork needed before the real owner can fully exercise his right to sell the property”.[8] In McKinsey’s view, by implication, all tenants are encroachers, without legitimate claims; only “real owners” have legitimate claims.

    In fact, such tenancy rights as exist in India’s lawbooks are the legacy of fierce struggles by India’s peasantry over decades. These struggles, to one extent or another, established the social claim that those who actually work the land have a primary right on its fruits, not those who extract rent of one kind or another on the basis of paper titles. It is clear that what McKinsey terms a lack of ‘clarity’ is actually a social question, a struggle between classes for possession and fruits of the land.

    In a 2007 document, the World Bank claimed that traditional land reform in India (abolition of intermediaries, tenancy legislation, and ceilings on land ownership), was no longer beneficial; indeed it was now turning harmful.[9] Land reform laws affected “the efficiency with which land is used by land reform beneficiaries as well as landowners targeted by land reform”. In other words, in order to boost ‘growth’, it was necessary to do away with land reform laws. In their place, the World Bank laid out a new charter: “Expand computerization, integration, and use of textual records to ensure full coverage [of land]. Provide a basis for statewide spatial coverage. Allow private sector participation in surveying, focusing government on a regulatory role.” Finally, it said, “Eliminate restrictions on land markets”, by legalising leasing of land; removing ceilings on rent; removing restrictions on the transfer of land, including to non-agriculturalists; and allowing direct acquisition of agricultural land by investors (i.e., without Government mediation).

    Going further, the Columbia University economist Arvind Panagariya, in his best-selling book India: The Emerging Giant (2008), called for “state-guaranteed titles” to land as a prerequisite for a “highly efficient land market in India”:

    Currently, an effort is under way to digitize the existing land records. While this is a useful exercise to ensure that the records that exist are properly documented and preserved, it will not solve the fundamental problem of the absence of state guaranteed titles. The latter requires legislative action. While politically complex, this reform has a very large payoff. Not only will it give millions of farmers peace of mind and avoid millions of law suits in future, it will also give rise to a highly efficient rural land market in India. (p. 322)

    Indeed, it was the Congress-led UPA government that, in August 2008, launched the “National Land Records Modernisation Programme” (NLRMP), with the explicit aim of moving to a system of conclusive, State-guaranteed titles of land ownership.[10] It appears that the state governments gave their assent, and sent in their plans for implementation of this scheme. Progress, however, was slower than the rulers wished, and the Economic Survey 2012-13, prepared under Raghuram Rajan, called for accelerating the NLRMP “to map land carefully and assign conclusive title”, and bring about “greater liquidity for land”.

    In 2014, the new Modi government made Panagariya the head of its central policy body, Niti Aayog, and he set about creating the land market of his dreams. A 2015 paper of the Niti Aayog states:

    …[O]wnership rights in India are also poorly defined. All ownership is presumptive and subject to challenge in the courts. This feature has undermined the development of a vibrant land sales market with the owner unable to get the true value of his piece of land. In turn, this discourages land sales as well when the farmer finds his [sic] piece of land too small to be a viable source of livelihood.[11]

    Thus neither international agencies nor successive governments, from the Congress-led UPA to the present Modi government, were ever coy to state their intent to part the “unviable” farmer from his or her plot of land through “vibrant land sales markets”.

    Making use of the Covid-19 crisis
    In April 2020, as India reeled under the world’s harshest lockdown – the country’s most terrible humanitarian crisis since Partition – commentators in the business press called for the Government to use the occasion to ram through politically difficult measures: “While the need to unleash the power of land was never in doubt, the coronavirus crisis has given us an opportunity to make it happen now.” Panagariya called on the Government not “to let the crisis go to waste”, pointing out “The crisis… gives the government the opportunity to introduce reforms in areas of land and labour markets that are harder in ‘peace’ time.”

    In April 2020, at the height of the lockdown, the Prime Minister launched a new project, ‘SVAMITVA’ (Survey of Villages and Mapping with Improvised Technology in Village Areas), for drone surveys to map all residential houses in rural areas. Once this is done, state governments would issue property cards for these houses to village households. (Note that this merely formalises existing home ownership; those who do not have house sites will not benefit from this scheme.) Apart from demarcation of individual rural property, other gram panchayat and community assets like village roads, ponds, canals, open spaces, schools, anganwadis, health sub-centres, etc. would also be surveyed and maps would be created.

    Why did the Government accord such urgency to this scheme? The Government claims this would “increase liquidity of land parcels in the market” (i.e., facilitate sales of property). Moreover, it is likely that, having set up a sizeable physical infrastructure and trained personnel for drone-based mapping in the rural areas, the Government may use the same later for mapping agricultural land as well.

    Niti Aayog’s Draft Land Titling Act
    In 2008, the UPA government undertook the National Land Records Modernisation Programme (NLRMP), with the aim of establishing ‘conclusive titling’ of land in India. This was revamped in 2014 by the Modi government as the “Digital India Land Records Modernisation Programme” (DILRMP).

    Taking this further, in November 2020, the NITI Aayog released a model Land Titling Act, which it is pressing state governments to adopt (land being a state, not Central, subject). Given that all state governments signed on to the NLRMP, they may well agree to adopt such legislations in their respective states now.

    A bit of background is required to understand the significance of the above step.

    Land accounts for 73 per cent of the assets of rural households (buildings, located on that land, account for another 21 per cent).[12] Who owns, who possesses, who has a right to the fruits of, who has specific use rights in, and who can transfer a parcel of land are not simple questions in India; nor are they merely technical or administrative questions, but social ones, which must be determined through a social process. There are multiple layers of land rights, often belonging to different persons. And these can be questions of life and death for those affected.

    At present, India has a system of ‘presumptive’ land titles, whereby the State does not guarantee land titles; evidence of ownership is provided by sale deeds, tax revenue receipts, etc. The onus of verifying ownership lies on the buyer of a property, for which the prospective buyer frequently carries out a ‘title search’ of existing documents.

    Under a system of ‘conclusive’ titling, titles to property are registered with, and guaranteed by, the State. In order to institute such a system, it is necessary to conclusively determine ownership of all land, including the claims of creditors, and the rights of other parties such as tenants. Once such a determination is made, the State will guarantee the rights of the owner against all other persons. Such a system is known internationally as a “Torrens system.” Not all developed countries have it. Indeed it is not prevalent even in most states of the United States.

    Legal scholar Jonathan Zasloff points out that, since land registration documents are to be accepted or rejected by bureaucrats, the present drive for a Torrens system provides enormous potential for bureaucratic corruption.[13] The official record will be determined by powerful vested interests.

    India’s history provides ample evidence of this.

    (1) Redistributive land reforms, to break the landlord monopoly on land, failed utterly in India. The historic report of the official Task Force on Agrarian Relations (1973) frankly admitted that such reforms never stood a chance: “Considering the character of the power structure obtaining in the country it was only natural that the required political will was not forthcoming.”[14] More recently too, the official Committee on State Agrarian Relations and Unfinished Task of Land Reforms (2009) pointed to “deep collusion between the large landholders [and] the political and bureaucratic structure”.

    (2) An estimated 200 million people (Scheduled Tribes and other forest dwellers) were to be covered under the Forest Rights Act of 2006. To date, just 4.1 million individual titles have been distributed, representing about 20 million people, or 10 per cent of the projected coverage. The situation is even worse with regard to community forest rights (CFR): just 3 per cent of the potential CFR area has been established to date.

    Even the much more modest aim of recording and securing tenants, and improving their share of the produce, was never attempted in most of the country. No doubt West Bengal carried out a major programme (‘Operation Barga’) in 1978-82, during which officials camped at 8,000 sites, and peasant organisations of the ruling Left Front mobilised sharecroppers to get registered. Yet even this covered only half the sharecroppers and half the sharecropped land, and more or less came to a halt by the mid-1980s.[15]

    The final burial of land reform
    Further, as Zasloff notes, if “land owners” are to be protected, “the question of who should own the land cannot be avoided”:

    Among other things, Torrens protects absentee owners against loss of their land to squatters under adverse possession: squatters obviously will lack title registration certificates, and thus lack title. A just land distribution system in India, however, might favor squatters, millions of whom are poor victims of an often savagely oppressive history, and in any event are the ones making productive use of the land, frequently for several years.

    Thus the Torrens system represents the final and formal burial of land reform; for once the State itself is the guarantor of the owner’s title, what question is there of the same State redistributing land to the landless? This despite the fact that there is much land to be redistributed, and (to quote the 2009 Committee on State Agrarian Relations) “The country will never be able to achieve a structural end to rural poverty without land reforms, including redistributive measures and security of tenure and ownership, prevention of usurious alienation from vulnerable segments of people and ownership of house sites.”

    In current times, the word ‘reform’ is used not in its historical sense of progressive change, but to refer to all sorts of utterly regressive neoliberal policies and even outright plunder. So too the phrase ‘land reform’ has been appropriated: It now refers not to the historically progressive task of breaking up the monopoly of land and abolishing all types of feudal extractions, but policies to grab the means of production from poor peasants.

    Indeed, as Zasloff points out, the very drive for titling can become a drive for dispossession:

    Formalization can pose a problem for the poor for several reasons. It forces them to defend their claims, and they may lack the resources to do so. It might undermine customary or collective forms of tenure that work on the ground but are difficult to formalize. The very increase in property value that formalization can achieve might enable a government to levy property tax, and if the poor are unable to pay it, they will be driven from their homes. More darkly, greater land values might encourage those interests with little interest in the niceties of due process to make the poor offers that they cannot refuse.

    But the implications of this process are not limited to dispossession of a section of peasants in the course of conclusive titling. The fixing of conclusive titles is meant to set the stage for a wider dispossession.

    In Part 2 of this article (to follow), we discuss changes in the world economy which have fueled the desire of international investors to get control of land; and how the planned restructuring of India’s agriculture will force kisans to part with their land.

    _________________________________________________________________________ 

    Endnote:

    The theoretician of conclusive titling for Third World property
    The justification for the move to conclusive titling derives from a fashionable theory propounded by the Peruvian economist Hernando de Soto in an international best-seller, The Mystery of Capital. Since its publication in 2000, the book has become a neoliberal bible, winning praise from neoliberal icons such as Margaret Thatcher, Bill Clinton, George W. Bush, two Nobel Memorial prize-winning economists, and a host of other celebrities and authorities. The institute set up and run by de Soto “has been ranked as the world’s second-most influential think tank, with assignments from the ILO, the UN, and some thirty governments in the Third World and former Soviet states.”[16]

    De Soto’s book is specifically aimed at refuting Marx’s thesis of irreconcilable class interests between the working people and capitalists. He is worried that Marxism may still provide the only explanation for the way things are, and so Marxist movements will revive: “Today, there are serious statistics that provide the anticapitalists with just the ammunition they need to argue that capitalism is a transfer of property from poorer to richer countries and that Western private investment in developing nations is nothing short of a massive takeover of their resources by multinationals.”[17]

    De Soto sets out to refute those who point to the misery of the Third World as an indictment of world capitalism. He claims that in the West (the advanced countries), strong formal property systems enable all persons to participate in the economy, hence capitalism is successful there; whereas this is not the case in the Third World. Using questionable methodology, he discovers that the global poor already have ample property: “By our calculations, the total value of the real estate held but not legally owned by the poor of the Third World and former communist nations is at least $9.3 trillion.” (italics in the original)[18] Of this, $6.7 trillion is the value of the property of “informal urban dwellings” (slums and shantytowns), and $2.6 trillion is the value of “informal rural area” (land holdings). But this is what he calls “dead capital”, because “What the poor are missing are the legally integrated property systems that can convert their work and savings into capital.”[19] If only they had the legal titles to that property, they could borrow against it and start or expand their business activities.

    We need not here discuss the whole of de Soto’s bogus theory, but one point is relevant for our present discussion. Contrary to de Soto’s depiction, rural land in India is not entirely undocumented. Moreover, given that rural credit in India is extended by public sector banks, not private ones, decisions on how much credit to extend, and what type of collateral to accept, are determined by Government policy. Rural landholders do possess various types of documents evidencing their right to the plots they hold. On this basis, millions of them already avail of bank credit. According to official press releases, 97 million farmer families have been registered on the PM-KISAN web portal, of whom nearly 67 million have Kisan Credit Cards. (No doubt, tenant farmers are unable to obtain credit against their land, but under any drive to formalize legal titles, they would be excluded from title anyway.) The problem of poor landholders is not that lack of conclusive title hinders them from obtaining credit, but that they face various types of exploitation as well as risks, so much so that they are frequently unable to service their loans, and thus some even face loss of land. Without improving the terms on which they labour, what use are de Soto-inspired drives to enhance the quality of their title, and enable them to borrow more?

    The real import of de Soto’s theory (although he avoids saying it directly) is that, as long as the property of the poor is not part of his “legally integrated property system” (with formal, tradable, legal titles), it cannot easily be taken over by the private corporate sector. When bank officials or private creditors turn up to seize a debt-ridden peasant’s land, they may face the wrath of a peasant community, indignant at the idea that land is to be bought and sold.  In de Soto’s words:

    A good property system… allows assets to become fungible [i.e., mutually interchangeable, like currency notes] by representing them to our minds so that we can easily combine, divide, and mobilize them to produce higher-valued mixtures. This capacity of property to represent aspects of assets in forms that allow us to recombine them so as to make them even more useful is the mainspring of economic growth, since growth is all about obtaining high-valued outputs from low-valued inputs.[20]

    As one commentator notes, “What de Soto actually argues is that these assets would produce significantly more wealth if they were drawn into the formal sector”[21]; but wealth for whom?

    Thus de Soto’s theory, while making seemingly pro-poor noises, actually prepares the basis for separating the poor from their meagre assets.

    _________________________________________________________________________


    [1] The Karnataka Land Reforms (Amendment) Bill, 2020 removes Section 79A of the Act, that allowed only those earning less than Rs 25 lakh per annum to buy agricultural land, and Section 79B, that said only people earning a living through agriculture could buy agricultural land. 

    [2] John Wilkinson, “The Globalization of Agribusiness and Developing World Food Systems”, Monthly Review, September 2009.

    [3] See The Land Market in Latin America and the Caribbean: Concentration and Foreignization, Food and Agricultural Organization of the United Nations (FAO), 2014.

    [4] See RUPE, India’s Peasantry under Neoliberal Rule, May 2017, Chapter III, https://rupe-india.org/66/partthree.html

    [5] The full form is “Right to Fair Compensation and Transparency in Land Acquisition, Rehabilitation and Resettlement Act, 2013.”

    [6] Jagadish Shettigar and Pooja Misra, “Land reforms: The next big game changer”, Hindu Business Line, November 23, 2020.

    [7] McKinsey, India: The Growth Imperative, October 1, 2001, p. 19. https://www.mckinsey.com/featured-insights/india/growth-imperative-for-india#. McKinsey named the land market as one of the “three main barriers to faster growth: the multiplicity of regulations governing product markets (i.e., regulations that affect either the price or output in a sector); distortions in the land markets; and widespread government ownership of businesses.” Do away with these, McKinsey said, and annual GDP growth would be 4 percentage points higher.

    [8] Ibid., p. 27.

    [9] India: Land Policies for Growth and Poverty Reduction (2007). The World Bank says: “econometric evidence also suggests that the positive impact of land reform legislation has been declining over time and actually risks becoming negative”. p. xxi.

    [10] “Moving towards clear land titles in India: Potential benefits, a road-map and remaining challenges”, Rita Sinha, Secretary, Department of Land Resources, Ministry of Rural Development, Government of India, August 2008.

    [11] Niti Aayog, “Raising Agricultural Productivity and Making Farming Remunerative for Farmers”, December 2015.

    [12] National Sample Survey Organisation, NSS 70th Round (January-December 2013).

    [13] Jonathan Zasloff, “India’s Land Title Crisis: The Unanswered Questions”, Jindal Global Law Review, 2011, Vol. XX Number X.

    [14] Quoted in “Land Reform Is Dead, Long Live Land Reform”, Economic and Political Weekly (EPW), May 19, 1973. Further: “In a society in which the entire weight of civil and criminal laws, judicial pronouncements and precedents, administrative tradition and practice is thrown on the side of the existing social order based on the inviolability of private property, an isolated law aimed at the restructuring of property relations in the rural areas has hardly any chance of success….”

    [15] Dipankar Basu, “Political Economy of ‘Middleness’: Behind Rural Violence in West Bengal”, EPW, April 21, 2001. Total land under sharecropping in West Bengal is estimated at 18-22 per cent of arable land; sharecroppers were recorded on 8.2 per cent of the arable land. West Bengal Human Development Report 2004, pp. 31-32.

    [16] Steffan Graner, “Hernando de Soto and the mystification of capital”, Eurozine, January 2007,https://www.eurozine.com/hernando-de-soto-and-the-mystification-of-capital/

    [17] Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else, p. 165.

    [18] Ibid., p. 41. These calculations are based on questionable methodology, which we will not enter into here.

    [19] Ibid., p. 173.

    [20] de Soto, op. cit., p. 168.

    [21] Steffan Graner, op. cit.

    A Telugu translation is available as a pdf.

    An official report prepared under the Vajpayee government in 2002 gives us a glimpse of some of the major lobbies pressing for restructuring of India’s agriculture and food economy.

    What interests lie behind the three Farm Acts of the Modi government? Various private corporate interests, domestic and foreign, with stakes in: trading in grain and other agricultural commodities; contract or corporate farming; logistics (including storage and transport of agricultural products); seeds, fertiliser, and other inputs; food processing; organised retail; and financial sector activities (including investment in commodity markets).

    Worldwide, many of these firms are involved in multiple activities. The leading agricultural traders own ocean-going ships, ports, railways, refineries, silos, oil mills and factories. Their activities include growing crops; selling inputs; buying output, transporting and storing it; processing crops to produce various products, or supplying other producers of final goods; and carrying on sophisticated financial speculation in agricultural commodity markets.

    The financial news service Bloomberg once said that Cargill was not only part of the value chain but was the chain itself – from the field to the shop counter. In a 2001 corporate brochure Cargill described itself thus: “We are the flour in your bread, the wheat in your noodles, the salt on your fries. We are the corn in your tortillas, the chocolate in your dessert, the sweetener in your soft drink. We are the oil in your salad dressing and the beef, pork or chicken you eat for dinner. We are the cotton in your clothing, the backing on your carpet and the fertilizer in your field”.[1] Four such firms, of which Cargill is the largest, control 70 per cent of the world market in agricultural commodities.

    Although the major Indian business groups Reliance and Adani have both strenuously denied pushing  the so-called ‘reforms’, and the Modi government has strenuously claimed that it has no plans to wind up  public procurement,  both Government officials and private investors state their views and demands more frankly behind closed doors. These demands are then processed into recommendations by official committees – dressed in the language of ‘greater efficiency’ and ‘fiscal savings’.

    Thus the High Level Committee on Reorienting the Role and Restructuring the Food Corporation of India (known as the Shanta Kumar Committee), set up in August 2014, received representations from various private corporate firms, including Adani Logistics, Cargill India, ITC Agribusiness Division, CII Food and Agriculture Centre of Excellence (CII FACE), Yes Bank, and so on. The report of the Shanta Kumar Committee fails to mention what they asked for, but the recommendations of the report themselves read like the wish-list of these firms.[2]

    Committee for Long Term Grain Policy
    However, an earlier high-level official committee report did reveal a bit more regarding the real intentions of those pressing for such ‘reforms’. Although its report is 18 years old, the present agenda of the rulers has been under preparation for even longer, and so the report of 2002 remains very relevant.  

    The High Level Committee for Long Term Grain Policy, headed by Abhijit Sen, was set up in 2000, and submitted its report in 2002. The Terms of Reference assigned to it required it to examine the following areas:

    i) Minimum Support Prices (MSP) and price support operations

    ii) the role of the Food Corporation of India (FCI)

    iii) the functioning of the Public Distribution System (PDS)

    iv) policies regarding buffer stocks, open market sales and foreign trade

    v) allocation of grain for rural development and other welfare programmes.

    (Since we are unable to locate a copy of the Committee’s Report on the internet, we are attaching a pdf of it here for those interested in reading it.)

    The aims of multinational grain corporations
    Keep in mind that the corporations of the advanced countries have been trying for many years to get control of the foodgrains market of India. (Thus we wrote about this question in 2004 and 2006; much of what we said then can be reproduced now without much change.[3]) These foreign corporations have been restrained by the existence of substantial domestic production in India, and by India’s long-standing system of food security (i.e., the public procurement of foodgrains and the public distribution system).

    Despite the fact that that the existing food security system has been undermined over the years of liberalisation, and despite its serious inadequacy even earlier in ensuring adequate nutrition to all India’s citizens, the sheer existence of this system as such even now constitutes an obstacle to the profit-drive of the multinational agribusinesses. For, to some extent, it protects domestic production (by guaranteeing grain-growers a reasonable price) and discourages speculation and excessive profit in foodgrains trade (by maintaining substantial public stocks which can be unloaded by the Government on the market at low prices in case of a steep rise in prices).

    Therefore it is imperative for giant firms of the imperialist countries to dismantle that system. This would pave the way for regular grain imports by India, and allow the grain multinationals to reap large profits in such trade. This shift toward import dependence would further orient Indian agriculture away from foodgrain, to growing such produce  as is demanded by the advanced countries (as well as by the elite of India and of other developing countries).

    In 2000 itself, when the Vajpayee government set up the Committee for Long Term Grain Policy (CLTGP), it was already exploring the possibility of shutting down public procurement, on the excuse of the excess food stocks. Note that these excess food stocks had arisen after the earlier United Front government had introduced the Targeted Public Distribution System (TPDS) in 1997, which divided the population into so-called “Below Poverty Line” (BPL) and “Above Poverty Line” (APL), and jacked up the prices of APL grains so steeply that this layer of consumers simply exited the PDS. The consequent piling up of foodgrains with the FCI was then adduced as evidence that public procurement and the PDS were no longer needed. The TPDS was in fact the first step in the destruction of the PDS.

    Lobbying for dismantling the FCI and PDS
    Rather than address this problem by reviving the PDS, a strong lobby at the time pressed for dismantling the FCI. The CLTGP stated that it “had to take note of an opinion that the existing system need not be salvaged and that the present crisis may in fact be an opportunity to do away not only with Minimum Support Prices (MSP) but also with the Public Distribution System (PDS), and restrict the role of the Food Corporation of India (FCI) to maintaining a reduced level of buffer stocks.”

    Indeed this view came not only from private corporate interests, but from the Government itself. The CLTGP reported:

    Subsequent to submission of its Interim Report, the terms of reference of the Committee were widened to include an examination of the possibility of providing direct income support to farmers in place of the present system of price support through physical procurement at MSP. In particular, it was asked to examine a proposal from the Ministry of Agriculture (MoA) to initiate an insurance based income support linked to Minimum Support Prices (MSP) to replace the current system of open-ended grain purchase at these prices by the Food Corporation of India (FCI). (emphasis added)

    However, given the enormous consequences of such a step, the proposal faced widespread opposition from state governments, which would have had to face mass unrest:

    With the exception of a few economists, the almost unanimous opinion was that price stabilisation was an important objective and that for this the present MSP system with open-ended procurement should continue. In particular, every State government that the Committee has consulted rejected any idea of doing away with the present MSP system….

    The “few economists” (the phrase perhaps refers to an economist member of the CLTGP, who was later the moving spirit behind the Shanta Kumar Committee) who plugged this dismantling proposal  argued that “MSP policy is a relic from the closed economy, that any intervention by government in physical trade and price formation is potentially distorting, that markets should be allowed to function freely without government intervention, and that if this does lead to price and income instability, the solution is to compensate for income loss through direct income transfers.”

    The threat to food production itself
    However, the CLTGP demolished this argument. It observed that such a policy might threaten agricultural production itself, and thereby the food security of the country:

    Price instability is not merely a matter of concern from the point of view of the welfare of producers and consumers and their incomes. There is very strong evidence from across the world and from India’s own experience in the past that agricultural investment and growth is adversely affected if price instability is high and, in particular, if farmers cannot be reasonably sure that prices will remain above their costs of production.

    Most countries adopt policies to stabilise farm prices, and the comparative performance of India has till recently been good. The coefficient of variation of rice and wheat prices in India has been contained to 4 to 7 per cent during the last twenty years as against 15 to 25 per cent observed in world prices [i.e., prices were much more volatile internationally than in India]….

    The Committee, therefore, reiterates its view that price stabilisation should be a principal goal of long-term grain policy, and is of the opinion that it would be premature to move towards any general scheme for farm income support to replace current MSP policy.

    What would be the consequences of stopping procurement? The CLTGP’s report observes that, first, with State agencies out of the market, the price paid to peasants even in the main area of procurement, namely, Punjab, Haryana and western U.P., would plummet. The Committee estimated that “without price support, farm level prices are unlikely to exceed Rs 350 per quintal for either paddy or wheat, much less than what almost all farmers actually received last year and also less than full production cost (including imputed costs for family labour, land and capital) in most states.” It estimated that, in the event of such a “sudden annulment”, “the immediate loss to wheat and rice farmers would be over Rs 40,000 crore (Rs 400 billion) if evaluated notionally as shortfall of likely farm prices from current MSP on entire production”. (In 2019-20 rupee terms, this sum would be a loss of nearly Rs 129,000 crore.[4])

    The fate of these farmers can be imagined from the fact that, as the Report notes, “producer prices are now below the cost of production in many parts of Eastern India where price support operations are not effective”. Thus if prices were similarly depressed in the main grain surplus states, output would fall.

    Output fall would lead to import dependence, hitting both producers and consumers
    If India’s cereals output falls, even as its requirements continue to rise, it would have to import cereals. At the time (in 2002), the CLTGP pointed out: “The FAO projects developing country cereals imports increasing from 107 million tonnes in 1995-97 to 198 and 270 million tonnes in 2015 and 2030, with very large shortages in Near East/North Africa and East Asia. In this scenario, North America and Europe will monopolise supplies in world trade and may cut the huge farm subsidies that they give currently. World cereals prices would then average at least at mid-1990s levels, i.e. twice present levels.” (ibid) That is, the advanced countries’ dominance in world grain trade would enable them to fix prices high enough such that they would no longer need to subsidise their domestic production.

    The CLTGP pointed out that, since India accounted for 15 per cent of world consumption of cereals, and it had a growing population, it was essential to maintain sufficient buffer stocks of its own. India’s buffer stocks at the time were equivalent to 15-25 per cent of world stocks, and 40 per cent of world trade in rice and wheat. Any large reduction in India’s buffer stocks “will almost certainly affect world prices”, the Committee warned, pointing out that both farmers and consumers would successively be hit. First farmers would be hit by depressed prices; later, once India became dependent on imports, prices could rise on the international market, and Indian consumers would be hit:

    Thus, although the immediate impact of “sudden annulment” would be the large adverse effect on farmers noted above, this could be followed by a price spike. If stocks are unduly reduced, and the PDS system is wound up, there would be no protection for consumers from the resulting hurt. This would of course be severe if stock depletion is followed by both a short domestic harvest and a world price spike, as has happened in the past, but could be significant even if harvests are normal but exports are allowed freely through a spike.

    Multinational grain firms: “We won’t invest unless buffer stocks are eliminated”
    The Committee gives a revealing and candid glimpse of the calculations of private firms. When asked whether they would invest in grain trade in India,

    representatives of multinational grain companies have told the Committee that large investments are unlikely, even with ECA [Essential Commodities Act] restrictions on movement and storage removed, unless there is long-term consistency and predictability in government policies and the potential threat posed by high stock levels is removed. (emphasis added)

    To whom are the grain stocks of the FCI a “threat”? Certainly not to the Indian people, for whom they represent an insurance against grain shortages and private profiteering. The FCI’s stocks are a threat to profiteering by the private sector. That is, if grain prices rise sharply, the people will apply pressure on the Government to control prices, by distributing the grain stocks through the Public Distribution System, or even by open market sales. The multinational grain companies would then not be able to reap the super-profits they are looking for. Hence they not only want an assurance of permanent Government policies in favour of the private sector, but the effective dismantling of the Government’s buffer stocks of grain.

    Disregarding the views of the multinational grain companies and their supporters in the Government and in the Committee itself, the CLTGP categorically concluded: “The Committee is therefore opposed to any dismantling of FCI, and considers premature suggestions that it be ‘unbundled’ by splitting it either regionally or by operation.”

    Thus the present rulers are fully aware of the consequences of the steps they are taking. In 2014, quite consciously, they set up the High Level Committee for Reorienting the Role and Restructuring of the Food Corporation of India (the Shanta Kumar Committee) to take an exactly reverse course.

    The Report of the Shanta Kumar Committee of 2014  did not even make a single reference to the CLTGP report. The Shanta Kumar Committee simply revived the very views which the CLTGP had refuted, without in turn attempting to rebut the CLTGP’s counter-arguments.

    Predictions largely borne out
    The CLTGP’s predictions in certain respects have been borne out by the trends in international trade and international prices.

    (1) As anticipated, developing country net cereals imports (i.e., cereals imports minus cereals exports) did rise substantially after 2002, to 179 million tonnes in 2015 (and further to 187 million tonnes by 2019). (See Chart 1)  In the last decade, imports as a share of total calorie availability rose in the Asia Pacific, sub-Saharan Africa and the Near East and North Africa.[5]

    (2) As anticipated, grain prices rose sharply over the lows of 2000. The international price of wheat rose steeply, finally settling at $215 in 2015 – higher than the price of the mid-1990s. Similarly, rice prices nearly doubled to $395, and maize prices nearly doubled to $164 in 2015.[6]

    As can be seen from these steep price movements, it makes little sense to base India’s food security on imports.

    In the first place, the international market in agricultural products is far removed from the idealised ‘free market’. Prices on the international market are highly distorted by subsidies in the advanced countries. While the advanced countries apply enormous pressure on India to scrap its meagre agricultural subsidies, the advanced countries’ own subsidies are vast multiples of India’s. According to the OECD, India’s budgetary spending to support agricultural producers was equivalent to 7.8 per cent of gross farm receipts in India. However, the total support to agriculture provided in the OECD countries (i.e., the rich countries) accounted for 17.6 per cent of gross farm receipts in those countries. The absolute sums involved are staggeringly large: OECD agricultural producer support averaged $319 billion a year during 2017-19, of which72 per cent ($231 billion) was given to producers individually. Keep in mind that employment in agriculture is less than 5 per cent of total employment in the OECD countries, where is it is nearly half of employment in India.  

    Secondly, any decision made on the basis of present prices might be invalidated by a major shift in price levels. But by that time the damage may have been long-term: India might become dependent on imports, and the structure of its agricultural production might shift to crops which are not for domestic consumption.

    India’s consumption needs are very large in relation to world trade in many commodities. For example, India’s wheat consumption is about half of world trade in wheat, and its rice consumption is more than twice world trade in rice. Hence any major shift to the international market will have a large impact on international prices.

    Financialising the food requirements of a nation
    Although the CLTGP report clearly warned against the proposed winding down of the FCI, the UPA government (which came to power in 2004) began traveling down the same path as the earlier Vajpayee government, by virtually freezing the MSP for several years and deliberately bringing down the procurement of wheat. This created an alibi for making large imports in 2006 and to a lesser extent in 2007. However, perhaps fearing the political consequences, the UPA government retreated from this policy, and imports once again fell. More recently, in 2016-17, too, India made large imports of wheat. However, imports remain sporadic, and there is no clear trend towards increasing imports, as can be seen from the chart below.

    The obstacle to increasing imports is the continuing sizeable production of wheat in India, which in turn is sustained by the system of public procurement. Hence what multinational grain traders, and the international agencies and economists that represent their interests, press for is the financialisation of food security. That is, instead of holding physical buffer stocks, the country would hold foreign exchange reserves (even if these reserves are made up of volatile foreign investments, which can fly out at a moment’s notice). Instead of guaranteeing peasants a price which covers their costs of production and sustenance, the rulers would promise them cash transfers to make up the gap between the market price and the desired price. Instead of guaranteeing consumers a certain minimum quantity of grains at low prices, the rulers would promise them cash transfers to ensure they can buy grains at the market price.

    The erstwhile Chief Economic Advisor, Arvind Subramanian, declared in the Economic Survey 2014-15 that, with the near-universalisation of Jan Dhan bank accounts, Aadhar numbers, and mobile phones (“J-A-M”), the Government could now do away with subsidies:

    If the JAM Number Trinity can be seamlessly linked, and all subsidies rolled into one or a few monthly transfers, real progress in terms of direct income support to the poor may finally be possible. The heady prospect for the Indian economy is that, with strong investments in state capacity, Nirvana today seems within reach. It will be a Nirvana for two reasons: the poor will be protected and provided for; and many prices in India will be liberated to perform their role of efficiently allocating resources in the economy and boosting long run growth.

    Indeed this is precisely the Nirvana the giant multinational grain traders known as “ABCD” (Archer Daniel Midlands, Bunge, Cargill, and Louis Dreyfus) would like to achieve. They possess large and growing financial divisions specialising in speculating on agricultural commodities:

    The trade in all commodities is characterized by a high level of risk. Any number of factors –natural disasters, crop failures, political or economic shifts – can affect the prices of commodities, which may be locked into a long supply chain. While prices can change quickly, commodity traders are dealing with a physical stock that is bulky, expensive to store, and harvested only at certain periods of the year. Prices are as much about anticipated supply and demand as they are about existing conditions. The level of risk and volatility in the trading of standardized and generic products pushes the companies to look for strategies that will increase their stability and predictability. The finance and risk management divisions of the ABCD traders are huge and absolutely central to their businesses. The companies trade in futures markets on their own account and on behalf of others.[7]

    Using their inside knowledge and research, these firms can reap profits whether international prices go down or up:

    Extreme price fluctuations in global agricultural markets do not threaten Cargill. On the contrary, the firm benefits from them. Early on, the company’s experts recognized the huge harvest shortfall of 2012. They speculated on increased prices for soybeans, wheat and corn, and made favourable future purchase contracts that could be traded on the stock exchange. When prices rose, they sold these contracts, making a considerable profit. In 2016, Cargill and its three major competitors made less money as a result of low world prices and fluctuations.[8]

    The precursor: the destruction of India’s indigenous edible oil sector
    How rapidly such a shift can take place can be seen in the case of edible oils. By 1991, India had achieved near self-sufficiency in edible oils, through an increase in both area and yields. However, with India’s joining the World Trade Organisation, it put imports of edible oils and oilseeds on Open General License, and steadily reduced import tariffs. Government efforts at promotion of domestic oilseeds were quietly folded up. Systematic economic sabotage of India’s indigenous oils too played a role, as an article by two veterans of the edible oil industry brings out starkly. The result was a rapid decline in India’s oilseeds production and its oil extraction and refining industry. Peasants in Gujarat growing peanuts and other oilseeds shifted to other crops.

    Among the major beneficiaries were the same ‘ABCD’ firms that control the world’s grain trade. These firms were present in Indonesia and Malaysia, the main producers of palm oil, which is far cheaper than other edible oils; they were also active in soyabean trading. These firms now exported to India, and set up operations in India as well. Among India’s major edible oil firms is Adani Wilmar, a joint venture between the ubiquitous Adani and the Singapore firm Wilmar, in which the US giant Archer Daniel Midlands has a 25 per cent stake. Other ABCD firms in India’s edible oil sector include Bunge and Cargill.

    Today a staggering 70 per cent of India’s edible oil consumption is imported. In the decade 2010-2020, India spent nearly $97 billion on importing edible oils. In the  present period, during which the Government claims to be promoting ‘Atmanirbharta’ (self-reliance), the Government has reduced the import duty on crude palm oil by 10 percentage points (from 37.5 per cent to 27.5 per cent) on November 27, 2020.

    Conclusion
    In brief, the financialisation of India’s food security would both devastate India’s peasantry (India’s single largest sector of employment) as well as leave the sustenance of 1.4 billion people at the mercy of international speculators. Vast buffer stocks would still exist; but instead of India holding these stocks, they would be held by multinational trading firms, and India would bid for them with borrowed funds. Thus the financialisation of food security also represents the surrender of food sovereignty.


    [1] Agrifood Atlas, Heinrich Boll Foundation, 2017, p. 26.

    [2] The Shanta Kumar Committee called for the winding down of the FCI, the system of public procurement, and the public distribution system (PDS), and for these to be replaced by cash transfers to farmers and consumers. It also called for the involvement of the private sector in every stage of the food supply chain.

    [3] We said in 2006: “the wheat imports are part of a broader policy which will further degrade India’s ‘food security’ and serve the interests of foreign and domestic big capital: (1) India’s production of foodgrains is being allowed to stagnate. That is, production per head is falling. This will create a large market here for imports of foodgrains (particularly wheat) from multinational corporations of the US, Europe and Australia. (2) Step by step the Food Corporation of India is being dismantled; the system of minimum support prices (MSPs) is being surreptitiously scrapped; the warehousing system is being privatised; and multinational grain firms are being allowed a free hand to purchase directly from peasants (in the absence of any state intervention). These corporations, besides, will be allowed massive speculation in foodgrains, at the expense of Indian consumers. (3) More land is being diverted to horticultural crops for export or for the urban elite. With the entry of giant multinational retail firms like Wal-Mart and Indian corporations like Reliance, such crops will be produced increasingly by contract farming. In this larger process, millions of Indian peasants – already in the throes of a profound agrarian crisis – would be displaced by imports, bankrupted and dispossessed of their land. At the same time the food security of the vast majority of people would be made the plaything of speculators and multinational corporations.” https://www.rupe-india.org/42/wheat.html At the time, however, the rulers postponed the full implementation of these changes when they felt that they could not manage the political consequences.

    [4] Using the Consumer Price Index for Agricultural Labour.

    [5] During the period 2007-09 to 2017-19, imports as a share of total calorie availability rose in the Asia Pacific, from 16.9 per cent to 20.8 per cent; in sub-Saharan Africa, from 16.9 per cent to 19.5 per cent; and in the Near East and North Africa, from 50.8 per cent to 53.7 per cent. Source: database of OECD-FAO Agricultural Outlook.

    [6] Data from the database of OECD-FAO Agricultural Outlook.

    [7] Sophia Murphy, David Burch, Jennifer Clapp, Cereal Secrets: The World’s Largest Grain Traders and Global Agriculture, Oxfam, 2014, p. 13.

    [8] Agrifood Atlas, p. 26.

    Correction

    A paragraph was inadvertently left out of our previous post. The matter has now been corrected. For those who received email alerts, please read the corrected post at https://rupeindia.wordpress.com/2021/01/05/modis-farm-produce-act-was-authored-thirty-years-ago-in-washington-d-c/.

    A Telugu translation is available as a pdf.

    The kisan agitation at the gates of Fortress Delhi has forced even the corporate media to take note of the corporate drive to capture control of the remaining non-corporate sectors of the country’s economy, including its agriculture; the phrase “Ambani-Adani” is now a popular term for this process.

    At the same time, the ‘reforms’ which the Modi government is trying to impose on India’s agriculture are part of a broader process of imperialism’s increasing capture of the Indian economy. Indian business giants such as Reliance and Adani are major recipients of foreign investment, as we have seen in sectors such as telecom, retail, and energy. At the same time multinational corporations and other financial investors in the sectors of agriculture, logistics and retail are also setting up their own operations in India. Multinational trading corporations dominate global trade in agricultural commodities. For all these reasons, international capital has a major stake in the restructuring of India’s agriculture.

    The opening of India’s agriculture and food economy to foreign investors and global agribusinesses is a longstanding project of the imperialist countries. This blog will be publishing a series of brief notes to highlight the role of imperialism in the present context. — Editor

    On December 18, addressing a Kisan Sammelan (farmer conference) in Madhya Pradesh by video conferencing, Narendra Modi declared:

    We are compelled to do things which should have been done 25-30 years ago…. The new laws that have been made for the farmers are in the news for some time now. These agricultural reforms have not come about overnight. Every government of this country has held wide-ranging discussions with the state governments in the last 20-22 years. (emphasis added)

    It is true that things now being carried out by the Modi government were recommended nearly 30 years ago. It is true too that governments of various parties at the Centre have been discussing these measures over the last two or three decades, more or less as Modi says.

    However, key provisions of the measures the Modi government announced in May 2020 as part of its ‘Atmanirbhar Bharat’ (‘Self-Reliant India’) package were in fact spelled out in a World Bank document of August 1991.

    That World Bank document was titled India: Country Economic Memorandum, vol. II.  (henceforth referred to as the Memorandum). At the time, India was still in its foreign exchange crisis of 1990-91, and had just submitted itself to an IMF-monitored ‘structural adjustment’ programme. Thus India’s July 1991 Budget marked the fateful start of India’s neoliberal era. The Memorandum (vol. I) bluntly clarified that India had little choice but to accept the IMF-World Bank prescriptions for ‘structural adjustment’:

    India’s creditworthiness has declined to the point where international sources of commercial credit have been cut off and, despite borrowing from the IMF, the external liquidity position is extremely tight. India, therefore, has to take strong measures to adjust the economy. The only real options are whether the adjustment is made in the context of an orderly, growth-oriented adjustment program with external financial support, or through a disorderly and painful process that will leave the country cut off from international capital markets for years to come and significantly reduce its growth.

    The Memorandum spelled out a programme designed to restructure India’s agriculture drastically, exposing India’s agricultural producers as well as consumers to grave dangers, while benefiting multinational agribusiness corporations. The Memorandum provided, in tabular form, a list of its ‘recommendations’, with a schedule for completing each (“immediate”, “medium-term”, “changes to begin in next budget”, etc).

    To summarise, the Memorandum called on the Government to do the following:


    1. Scrap subsidies for agriculture – on fertiliser, water, electricity, bank loans – and open agriculture to foreign trade

    a.) The Government should eliminate all subsidies on fertiliser over the course of four years. It should scrap protection for India’s fertiliser industry, and link domestic fertiliser prices to world prices; “restructure” the fertiliser industry (i.e., allow the closure of fertiliser units). It should do away with Government intervention in, and regulation of, fertiliser marketing.

    b.) It should eliminate ‘priority sector’ lending quotas, which reserve a share of bank credit for agriculture, and raise interest rates on agricultural lending, eliminating all subsidy.

    c.) It should increase charges on all it supplies to agriculture, such as irrigation, veterinary and other extension services. It should enlist greater private sector involvement and investment in these.

    d.) It should scrap protections from imports for agriculture. For a start it should open up to imports of edible oilseeds. It should also remove restrictions on agricultural exports.

    e.) The Government should promote private research in seeds, remove regulations on private marketing of seeds, and remove subsidies for seeds.

    f) It should raise electricity tariffs for agriculture to the level of non-agricultural tariffs.

    2. Move toward dismantling the entire system of public procurement and distribution of food.

    a.) “Food Corporation of India (FCI) should reduce its large direct role in purchasing, transport, and storing grain, through subcontracting to licensed agents, wholesalers and stockists, and providing price incentives for farmer storage of grains.”

    b.) India should maintain only a small buffer stock, and turn to the world market at times of shortage, keeping foreign exchange to handle purchase in deficit years.

    c.) Price support programmes should be divorced from public procurement.

    d.) Food subsidies should be reduced by targeting only those officially defined as poor. The “non-needy” should be denied access. The Government should “Use new methods of reaching the most vulnerable, including private sector distribution.”


    Implementation of the World Bank programme over the years
    The timetable prescribed by the Bank paid little heed to the political difficulties the Indian rulers would face in implementing such a comprehensive attack on the livelihoods of India’s peasantry, the nutritional requirements of the majority of people, and above all the country’s economic sovereignty. Nevertheless, on most of these fronts, successive Governments of India tried to follow the Memorandum’s script, albeit haltingly, with partial retreats from time to time in the face of popular resentment and opposition.

    * Subsidies on phosphatic and potassium fertilisers have been slashed, and their prices decontrolled, leading to a sharp drop in their use, with harmful consequences for the soil nutrient balance.

    * The share of agriculture in bank credit has fallen steeply, leading to a rise in credit from moneylenders, the growth of peasant indebtedness, and over 300,000 peasant suicides since the late 1990s.[1]

    * Public sector extension services for agriculture collapsed between the mid-1990s and the mid-2000s; there has been a partial revival thereafter, but these services are still grossly inadequate.

    * Quantitative restrictions on agricultural imports were removed, and tariffs on agricultural imports have been lowered. As a result, India imports about half of its requirement of edible oils. Other produce too has faced the threat of imports.

    * Once-dominant public sector seed firms steadily withdrew from the market for seeds; private sector seed firms became dominant.

    * The recent Electricity (Amendment) Bill, 2020, proposes to do away with all electricity cross-subsidies at one stroke, implying a massive burden on an already crisis-ridden peasantry.

    Drastic restructuring of India’s food economy

    Now the Modi government is dramatically advancing the implementation of the above programme, using the Covid-19 crisis as cover. The dismantling of the public procurement and distribution of food is to be implemented by the three agriculture-related Acts recently ‘passed’ by Parliament.

    Of course, the implementation of the World Bank’s guidelines began much earlier. The Targeted Public Distribution System introduced in 1997 drove so-called “Above Poverty Line” consumers out of the Public Distribution System, thereby crippling the entire PDS – leading to a build-up of grain mountains and so creating an excuse for winding up the PDS itself.

    Prime Minister Vajpayee told peasants bluntly that they needed to adjust to global ‘comparative advantage’. Speaking at a gathering in Haryana on March 6, 2001, he exhorted them to “Look beyond wheat and paddy”, and to switch to “horticulture, floriculture, oilseeds and vegetable production and have a good export potential.” The farmer, he explained, had to adjust and respond to the growing pressures of the world market — especially with the removal of quantitative restrictions under WTO — by producing less food and more of other crops. Only then, he said, would they be able to benefit from the free market. In this way he made explicit the policy of discouraging foodgrains production as a part of ‘globalisation’.

    In 2002, the High Level Committee on Long-Term Grain Policy noted in its report: “the Committee had to take note of an opinion that the existing system need not be salvaged and that the present crisis may in fact be an opportunity to do away not only with Minimum Support Prices (MSP) but also with the Public Distribution System (PDS), and restrict the role of the Food Corporation of India (FCI) to maintaining a reduced level of buffer stocks”.

    However, the Vajpayee government’s agriculture and food policies led to an agrarian depression, to widespread hunger and to rural discontent. This contributed to the defeat of the BJP in the 2004 elections. The subsequent Congress-led UPA government no doubt thought it prudent to backtrack on some of these measures for a while, even as it kept trying to find openings to revive the ‘reform’ programme.

    In his speech at Varanasi last Diwali (November 30), Narendra Modi vehemently denied that the Government was planning to wind up the system of public procurement at minimum support price (MSP):

    I am aware that decades of deceit make farmers apprehensive. The farmers are not to be blamed, but I want to tell the countrymen, my farmer brothers and sisters, that work is being done with intentions as pure as Gangajal. This I want to say from the banks of the Ganges, from the holy city of Kashi.

    However, when the kisans conclude that the Government intends to wind up public procurement, they have a much more solid basis – namely, documents of the Government’s own official bodies. In 2014, the Modi government’s very first year in office, it appointed the High Level Committee (HLC) on Reorienting the Role and Restructuring of the Food Corporation of India. The Committee was headed by BJP leader Shanta Kumar. The HLC briefly acknowledged that the “FCI was mandated with three basic objectives: (1) to provide effective price support to farmers; (2) to procure and supply grains to PDS for distributing subsidized staples to economically vulnerable sections of society; and (3) keep a strategic reserve to stabilize markets for basic foodgrains.”

    While perfunctorily acknowledging the need for these objectives at some time in the distant past, the HLC more or less dismissed those objectives for the present day. It instead recommended: involving private firms at every stage of the food supply chain; outsourcing food stocking operations to the private sector; reducing public sector grain stocks; penalising state governments that provide bonuses to farmers above the MSP; replacing public procurement of grains with cash transfers to farmers; deferring implementation of the National Food Security Act (NFSA); drastically reducing the percentage of the population to be covered under the NFSA; steeply hiking the issue prices of foodgrain, and replacing the public distribution system by cash transfers to consumers. Indeed the HLC baldly declared that the FCI should turn into an “agency for innovations in Food Management System”.

    In essence, the report propagated the notion that the Government can save vast sums by doing away with the physical system of public procurement, transport and distribution of foodgrains, instead handing out some cash to farmers and consumers, and leaving the rest to the ‘market’. (This is the propaganda of finance: that all public needs can be financialised – stripped of their concrete forms, i.e., of actual provisioning, and converted instead into ‘lean’, purely financial mechanisms.[2])

    It is revealing to compare the Shanta Kumar Committee report recommendations with those of the World Bank Memorandum of 1991, which stated:

    “Third, there is a need to reconsider FCI’s role in market operations within the context of changing program objectives and the need to contain costs. FCI’s operations are already too large and complex: rising costs indicate the organization’s inability to cope with current, let alone expanded responsibilities…. Marketing is an activity which by its very nature is ill-suited to cumbersome, public sector entities. FCI should reduce its large direct role in purchasing, transporting and storing grain, through subcontracting to licensed agents, wholesalers and stockists, and providing price incentives for farmer storage of grains.

    “Fourth, stock levels and management require review. High levels of buffer and working stocks for wheat and rice (currently over 19 million mt) are both expensive and unnecessary, especially in light of changing objectives for market interventions and a new role for FCI. India could be adequately protected with a smaller buffer stock, entering the world market to obtain supplementary supplies in poor production years and keeping foreign exchange to handle purchases in deficit years. Concerns of price rises when India enters the market could be mitigated using tools of price risk management (forward and futures contracts) coupled with more accurate information gathering on production and stocks, and improved mechanisms for decision making on emergency food imports. FCI could retain responsibility for the maintenance of India’s buffer stock. A review of stocking levels, analysis of the costs and benefits of different stock levels, and development of recommendations for encouraging private sector storage is recommended.

    “Finally, the Govemment needs to review price support objectives for each commodity, cross commodity price impacts, and the structure of domestic incentives. Current efforts to adjust procurement prices at the margin through the addition or subtraction of price elements defeat the objectives of these prices: they are meant to provide price supports, not substitute for ptice setting through the market. A review of the price support system is recommended, to revise objectives and provide clear guidelines for the role and levels of price supports. In general, procurement prices need to be divorced from the objectives of food distribution schemes, and need to be set at levels which provide support in surplus areas, but not excessive returns. There also needs to be explicit recognition of international price signals. Allowing increased trade of rice, wheat and cotton at the margin would dictate greater attention to world prices in setting procurement price levels. For rice and wheat, a more focused targeting of the PDS may result in fewer market purchases, and thus less need to use high procurement prices to attact surpluses into the procurement system.

    “India should also consider the potential benefits and costs of increased openness in foodgrain trade. Gradual opening of the sector to international market forces would improve competition, with benefits for both producers and consumers.”

    Thus the Government’s present “Atmanirbhar” plan for agriculture closely adheres to the World Bank’s instructions of 1991. The foreseeable impact on Indian citizens of this package was outlined in a previous blog entry.

    In 1996, RUPE’s publication Aspects of India’s Economy, no. 18, had discussed the World Bank Memorandum of 1991 in detail. It pointed out the deceptive nature of the Bank’s claims regarding the benefits of globalising Indian agriculture; the inherent problems in leaving agriculture to ‘market forces’; the mirage of better terms on the world market; how India would be squeezed as a seller on international markets; how it would be squeezed as a buyer on international markets; the implications of volatility on the international market; the illusion that huge markets would open up for India with the creation of the WTO; the means the developed countries would use to continue to protect their markets, including new forms of subsidies; and the fact that multinational corporations, not Indian peasants, would be the real beneficiaries of such a globalisation. Although there are several new developments to be taken account of in the past 25 years, much of what we said then has been borne out since, and as such remains relevant. A pdf of it can be accessed here.


    [1] Meanwhile, there has been a steep rise in loans to traders and the corporate sector disguised as agricultural loans, which accounts for the apparent rise in agricultural loans in the 2000s. R. Ramakumar and Pallavi Chavan (2014), “Bank Credit to Agriculture in India in the 2000s: Dissecting the Revival,” Review of Agrarian Studies.

    [2] For example, in place of public health facilities, health insurance; in place of public education, school vouchers.

    The following is a Marathi translation of the article “Peasant Agitation against Three Acts: Not Their Fight Alone”. [pdf] We thank all those involved in its translation.

    The following is a Tamil adaptation of the same article, jointly published by CPDR – Tamil Nadu and CPCL – Tamil Nadu. [pdf] A complete translation has been published on the blog “Tamil RUPE,” run by Tamil Friends of RUPE.

    — Rahul Varman

    Along with COVID 19 and its associated terminology, we are currently being educated in a new jargon regarding one of the oldest occupations, namely, teaching. We now are told of online learning, e-teaching, edtech, edutech, smartphones in the new role of teacher, and so on and so forth.

    India is a large country with a very young population, where almost all households (at least in the urban areas) have some or the other experience with education. But in recent months ‘online classes’ have become a new normal, from the most elementary level, such as teaching nursery rhymes, to the most advanced level – the courses offered to graduate or medical students. Some think that, though the pandemic forced it upon us, this development opens up new possibilities and realms for education; others consider this a temporary phase, after which things would go back to ‘normal’.

    Continue Reading »

    Telugu translations of two recent articles are now available in PDF format:

    (1) Peasant Agitation against Three Acts: Not Their Fight Alone.

    and

    (2) Mayday 2020 and the Creation of Wealth

    Translations by P. Jamuna.

    Tamil Friends of RUPE (https://tamilrupe.wordpress.com/) have recently posted Tamil translations of the following two pieces:

    A Brief Comment on Crisis and Predation: India, Covid-19 and Global Finance by RUPE – Amiya Kumar Bagchi and The story of schistosomiasis in Mao’s China and after – Zhun Xu.

    Tamil Friends of RUPE has translated the book Crisis and Predation: India, Covid-19 and Global Finance.  The book will soon be published by Chinthan Books, Chennai (https://www.commonfolks.in/books/chinthan-books).

    The previous post, Peasant Agitation against Three Acts: Not Their Fight Alone, is now available in a Hindi translation in PDF format.

    The Hindi translation and the English original have been published by the Trade Union Solidarity Committee, Mumbai, in an attractive booklet form, with illustrations. 

    Research Unit for Political Economy, Dec. 3, 2020

    As we write this, some hundreds of thousands of peasants – men, women, youth and children – are camping at entry points to the country’s capital, demanding the scrapping of the three farm legislations recently imposed on the country by the present Central Government. It has been some time since the country has witnessed such an inspiring challenge to the policies of the rulers. It is especially inspiring because it is organised on class demands of the working people.

    The Central Government, which began by fortifying the city as if against an invading army, firing water cannon and tear gas on the peaceful protesters, has been compelled to change its stance. It has been forced to call them for unconditional talks. Experience tells us this is a merely tactical shift, and the rulers have no intention of changing the thrust of their basic policies.

    Nevertheless, the rulers’ climbdown is in itself a significant victory for the peasant agitation. There is, moreover, widespread sympathy for the cause of the peasants nationwide.

    Below we make a few points with regard to the broader significance of the agitation and the questions underlying it. These points may not be novel, but we feel they need to be focussed on.

    Threat posed to the peasantry

    1. The immediate aim of the peasant agitation is the scrapping of the three farm Acts1  (these bypass the Agricultural Produce Marketing Committee (APMC) mandis, do away with limits on stocking agricultural commodities, and facilitate contract farming). The Government claims it is giving peasants the “freedom” to sell their crops anywhere to anyone, they will not be compelled to go to the mandis. In fact most peasants in India already have that “freedom”, and as a result they face much worse exploitation. In direct opposition to the Government’s claim, what peasants want is not this bogus “freedom”, but the security that their crops will be procured by state agencies at the Minimum Support Price (MSP). Rice and wheat growing peasants of certain states, have had such a guarantee. That is now being taken away, under cover of “liberating‟ peasants from the APMC mandis.

    These Acts will lead to a situation where corporate firms will procure crops from peasants at unregulated prices, hoard stocks, and control agricultural trade. (Besides, the Electricity Amendment Bill will result in a steep rise in electricity costs for agriculture, squeezing the peasantry. So the peasant organisations have demanded that it too be scrapped.)

    As the food supply chain comes under greater and greater corporate control, the working peasantry stand to lose their landholdings in one way or the other. Since it is cheaper for corporations to deal with a few, large standardised suppliers than to handle a large number of small suppliers, it will become increasingly difficult for small peasants in the surplus-producing states to survive. Small peasants constitute the overwhelming bulk of farmers, even in Punjab. Already struggling between the scissors of input and output prices, they may be forced to part with their holdings. (Those who survive may come under tighter corporate control and supervision over the production process, so that in effect they hold only the paper rights to the land.) Larger, more mechanised farms will require a smaller labour force. Thus, while the agitation is described as a “farmer‟ agitation, it represents principally the interests of poor and middle peasants, not all “farmers‟.

    Basic thrust: to wind up public procurement and the public distribution system

    2. While those agitating at Delhi are toiling peasants, they may not be the most downtrodden and impoverished of India‟s peasants. These most downtrodden can be found in the agriculturally backward regions of our country, and their crops are never procured by any official agency at the MSP. However, the present peasant agitation is in the interests of the latter peasants as well.2

    To repeat, the crux of the peasant agitation is the demand for a guarantee of continuing public procurement of foodgrain at MSP, on an open-ended basis (i.e., all grain offered for sale will be procured by public sector bodies at mandis, at MSP). The Public Distribution System (PDS) is based on this procurement. The significance of the peasants’ demand is thus not limited to their own livelihood. The Minimum Support Price regime can be effective only for the crops in which there is public procurement, principally wheat and rice. The Act allowing the bypassing of the APMCs in effect spearheads the winding up of public procurement of foodgrains.

    This system of public procurement and distribution has been under veiled attack for some years, and now has been under open attack since 2014, when the newly-elected Modi government set up the High Level Committee (HLC) on Reorienting the Role and Restructuring of the Food Corporation of India, headed by BJP leader Shanta Kumar. The Shanta Kumar Committee report, submitted in 2015, calls in effect for eliminating both public procurement and distribution, and for substituting them deceptively with cash transfers. Cash transfers, in fact, will compensate neither the peasant, nor the consumer, for reasons we will explain later (in a separate piece).

    If procurement is undermined or dismantled, the PDS will necessarily be wound down further, with grave consequences for all working people across the country. As they are forced to purchase food at higher prices, their real incomes (i.e., what their money incomes can buy) will fall. Thus the present demand to scrap the new anti-peasant laws is in fact an immediate demand of India’s working people, not only a demand of the peasants from the surplus grain producing areas, nor only of the peasantry as a whole.

    Depression of wages and aggregate demand

    3. Since the situation of even industrial employment is bleak, the peasants displaced from agriculture cannot be absorbed in any other sector. India’s labour force is much too large for emigration to absorb a significant share, and anyway such opportunities abroad are vanishing fast. So the displaced peasants will join the reserve army of labour, and this rise in the reserve army will depress the general level of wages, as desperate labourers compete for scarce jobs. The process of shrinking employment and depressed wages will depress aggregate demand, in turn further reducing employment.

    Rendering the country even more vulnerable to imperialist pressure

    4. A country that does not ensure its food security will remain vulnerable to arm-twisting by imperialist powers. During India’s mid-1960s food crisis, the cash-strapped country was compelled to import large amounts of wheat as food aid from the United States (which was trying hard at the time to export its wheat surpluses). The US used this “aid‟ as a lever to dictate India’s economic and foreign policy.

    The Shanta Kumar Committee report glibly declares that those days are gone: it claims India has huge foreign exchange reserves, and can make large grain imports without batting an eyelid; and its foodgrains production is more than sufficient for its needs. Hence there is no need for public procurement, stocking, and distribution of foodgrains, i.e., the Food Corporation of India and the PDS can for all practical purposes be wound up.

    However, India’s foreign exchange reserves are not built up out of export surpluses, and hence they are not secure. Rather, they consist entirely of borrowings and other liabilities, and about four-fifths of them can be withdrawn at short notice by foreign investors. For this reason, despite the country’s central bank holding unprecedented levels of foreign exchange reserves, the Indian government has been lobbying with the US government for foreign exchange “swap lines‟, a type of borrowing between central banks which can be availed of in an emergency. (If the US were to provide India swap lines, it would extract a price in strategic and economic terms.)

    If India’s food security rests solely on the shaky foundations of its foreign exchange reserves, without any physical grain reserves, a foreign exchange crisis can rapidly become a food crisis as well. Moreover, when a large country like India enters the world grain market as a big importer, international grain prices would rise sharply. Imagine if, at the time of the Covid lockdown, which was also a period of very rapid outflows of foreign capital, India did not have substantial food stocks, but had to start the process of imports.

    In recent years India has faced severe pressure to open up its agricultural markets. It has been the target of concerted campaigns at the World Trade Organisation by various exporting countries, who have termed India’s policies regarding rice, wheat, pulses, cotton and sugar as violative of the WTO Agreement on Agriculture (AoA). The US has been spearheading this drive, contesting India’s claims that its support to Indian agricultural producers is in keeping with the AoA. At the Bali conference of the WTO in 2013, India’s food procurement and public stockholding programme was condemned by developed countries.

    With the support of some other Third World countries, India won a temporary reprieve, a “peace clause” (in exchange for conceding something else), suspending any punitive action till a resolution was achieved. However, the developed countries have been unwilling to resolve this issue, and instead have kept up the pressure on India to withdraw support to its farmers. At a virtual WTO meet May 25 this year, at the height of the Covid crisis, food exporting countries criticised the new aid packages being provided to farmers by some governments in response to the crisis claiming they would “distort” global food trade.3

    Even as India put up a display of opposition at the WTO, the Government’s steps towards winding up public procurement in essence unilaterally concede the substance of the dispute – in favour of the developed countries. The developed countries know well that, once the FCI no longer exists in its present form, India‟s seeming self-sufficiency in grain can get eroded quickly. Further, without the weapon of large physical buffer stocks of foodgrains, the Government will be powerless to intervene against profiteering private corporations. And so the crisis of India‟s agriculture and food system in 1965 is still relevant to India today.

    India in the mirror of Mexico

    5. The above warnings are not speculation or scare-mongering. They are simply conclusions drawn from observation of the worldwide pattern of the impact of liberalisation, privatisation and globalisation on agriculture. For example, this is precisely the model imposed on Mexican agriculture since the 1990s, and more particularly since 1994 (the North American Free Trade Agreement).

    — Mexico’s state trading agency (its equivalent of FCI) was dismantled.

    — All state measures to support agricultural production were slowly wound down.

    — Subsidies on its staple food (corn) were slowly wound down, and these were replaced by selective cash transfers to peasants and consumers.

    — Imports of US corn (to Mexico, which is the very home of maize and the world‟s great treasury of maize varieties) tripled.

    — Family farms in Mexico collapsed by well over half.

    — Total agricultural employment fell sharply, without adequate growth in other sectors to absorb the displaced peasants.

    — Thus unemployment nationwide rose.

    — The number under the poverty line rose.

    — More than half the population cannot meet basic needs and one-fifth cannot meet food needs.

    — The resulting demand depression caused Mexico‟s GDP growth rates to fall, to near the bottom for Latin America.

    — Emigration rose by nearly 80 per cent as desperate unemployed peasants tried to enter their northern neighbour.

    — The prices of the staple food (tortillas made from corn) rose steeply.

    — And the entire market for maize flour is controlled by just two Mexican firms (Grupo Maseca controls 85 per cent) – a position that Ambani, Adani and Walmart would like to occupy in India today. (We will provide details of this in a later blog post.)

    Regime’s standard response: division and communal poison

    6. In response to the democratic movement of the peasants, the regime is resorting to its standard response: dividing the people and sowing communal poison. Since the largest contingent of peasant agitators are from Punjab, word seems to have gone out to pliable media chieftains that they should portray this as a Punjabi agitation, and more particularly a Sikh agitation. The head of the BJP IT cell and the BJP Delhi spokesperson propagated that the farmers’ agitation wasled by Khalistani forces, or had a Khalistani agenda.

    This has been quickly refuted. Indeed peasants from many other states, particularly Haryana, continue to flock to the agitation. But more basically, none of the agitators’ demands pertains to Punjab as such; even less do they pertain to the religious identity of the Sikh community. There is not a single demand raised concerning the distribution of river waters, control over border regions, the status of holy places, religious symbols, religious restrictions, in a word, not an iota of basis for presenting a distorted picture of the agitation. Indeed some of the largest peasant and agricultural labour organisations leading the present mobilisations have long termed such issues as diversionary.

    Although the new Acts have been foisted by the Central government on the states, the demands of the peasant agitation are also not demands of states versus the Centre. After all, the principal demand is not that states should be free to, say, export their crops to other countries disregarding the Centre and other states. Rather, the demand is precisely that the Centre should continue to procure the crops produced in these states and distribute them nationally. That is, the demands are purely secular, common class demands of the diverse peoples of India.

    The test for the present regime

    7. These Acts have not come out of the blue. Anyone who has tracked the progress of India’s so- called “reforms‟ in agriculture knows that these measures have been pushed by powerful interests for more than two decades; the “Targeted Public Distribution System‟ introduced by Chidambaram as Finance Minister of the United Front government in the late 1990s dealt the first hammer-blow to the PDS. The Congress-led UPA government too tried to subtly push the same agenda, but it was keenly aware of the difficulties involved, and could not make headway. Dissatisfied with the UPA government‟s inability to proceed on various pro-corporate “reforms‟ of this nature, the ruling classes, prominently India’s corporate sector, plumped for Modi before the 2014 general elections.

    This issue, then, is a test of the present regime’s ability to serve the interests of the corporate sector and international capital.

    Continuing viability of class struggle

    8. India’s democratic sections have faced intensified attacks from the present regime over the past six years. Some have repeatedly looked to the results of one or the other assembly or parliamentary election, and towards that end, various parliamentary alliances, in the hope that the juggernaut of repression can be stopped thereby. Their hopes have been repeatedly dashed, even where the election results turned out in line with those hopes. 

    Nevertheless, this relentless expansion of the BJP’s power has not been able to prevent class struggles from emerging. As we argued after a peasants’ march two years ago, “In other words, the apparent invincibility of the Modi regime is concentrated in electoral politics and various wings of the State. In the field of class struggle, by contrast, it has been unable to prevent people from rising against it, and at places even winning their demands. That fact should be a pointer to where effort needs to be focussed.” 

    Across the diverse conditions of India, peasants have been waging bitter struggles on a wide range of questions. At many places, they face exploitation at the hands of moneylenders, input dealers, traders and landlords (sometimes combined into a single person); at others, exploitation as agricultural labour; at others, eviction by forest officials; at others, corruption by local officialdom in league with private interests; at others, the usurping of their common resources by private interests; at others, displacement by rapacious corporate projects; at yet others, the robbery of their water resources by one or the other other means, including pollution. It is necessary to see the struggle at Delhi as part of this broad stream of struggle of India’s toiling peasantry, that has a great liberating potential for Indian society.


    From the Introduction to Aspects of India’s Economy no.s 66-67

    Ultimately, all ruling class programmes to address the agrarian distress… separate the question of repairing “agriculture” from question of addressing the crisis of the peasantry that works it. They ignore the scope for the peasantry as an agent for the transformation of agriculture; indeed the dominant strain treats the peasantry as the main obstacle for such a transformation.

    Nor should one expect otherwise, given the transformation they are seeking. It is up to those seeking a different form of addressing the agrarian crisis to take as their starting point the peasantry, particularly the small, marginal and landless, and locate the obstacles to the release of their productive, organisational, collective and transformational capacities.

    Notes:

    1. Farmers Produce Trade and Commerce (Promotion & Facilitation) Ordinance 2020, The Farmers (Empowerment & Protection) Assurance and Farm Service Ordinance 2020 and The Essential Commodities (Amendment) Ordinance 2020.

    2. For two reasons: First, public procurement at MSP in any region provides a benchmark without which prices in other regions would fall much more steeply. The second reason is spelled out in the following paragraphs.

    3. According to a WTO press note, “Several Cairns Group (a group of food-exporting countries) members also repeated their call for a reduction in trade-distorting domestic support. The desire for enhanced market access expressed by some food-exporting countries was met with resistance from some developing countries, who said now is not the right time to discuss this issue.”

    By Amiya Kumar Bagchi, Emeritus Professor, Institute of Development Studies, Kolkata

    The book is an in-depth study of the Indian economy in the post-Covid situation  and its place in global finance. It has both a  strong conceptual  apparatus and a solid empirical base. It sometimes reads like an Alice in Wonderland book when it gives an explanation of the weird actions of the government of India. Why, for instance,  does the government refuse to release the huge stock of 77 million tons of food grains for the public distribution system when India ranks even lower than some of the poorest Sub-Saharan countries in respect of its hunger index? Or why does the government want foreign capital to enter the government bond market when it is well known that the volatility of such capital has caused crises in countries as  far apart as Greece and Indonesia? Or finally, why does the Indian government vote with the United States against the proposal to expand the IMF’s special drawing rights by 500 billion US dollars, when it would have been clearly in India’s interest to support the proposal?

    In every case the answer seems to be that the government has chosen a path of willing dependence on the United States – a dependence that has been strengthened by the recent military and security agreements with the USA. The government’s refusal to release food grains  for public consumption is owing to the fact that it would involve higher public expenditure, and squeeze the space for foreign investors and their collaborators among India’s big capitalists. The  slashing of public investment has created an endemic shortage of effective demand and has created a permanent reservoir of exploitable labour to the benefit of both foreign and Indian capital. Much of Indian big capital has now become ‘internationalized big capital’. In order to get out of this rut and get on to a path of what the  authors call ‘democratic economic development’, four steps are crucial: first, expansion of public expenditure on food security, education and health care; stopping the privatization of public enterprises; reversing the steady trend towards  capital account convertibility; and finally , developing strong trade and investment links with developing economies such as China, Vietnam and South Korea.

    This book can be used as a textbook on finance and development in developing countries. I would also recommend the book strongly to anybody interested in understanding the tentacles that bind developing countries to US capital, and  how to move on to a path of democratic economic and social development.

    DOWNLOAD BOOK FROM THE WEBSITE OF ASPECTS OF INDIA’S ECONOMY